Mha Plc · LSE:MHA
Mha — ESG Presentation (September 2024)
26 slides from Mha's sustainability presentation, September 2024
Slide 1: FD Update: Accounting for Sustainability, September 2024
FD Update: « Accounting fort September 2024 — = eee - An independent member of Now, for tomorrow G mha bakertilly INTERNATIONAL
Slide 2: Copyright and liability notice
You shall not copy, make available, retransmit, reproduce, sell, disseminate, licence, distribute, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these seminar materials provided by MacIntyre Hudson LLP (“MHA”) in an
Slide 3: Webinar housekeeping and Q&A
A copy of the slides has been sent to you this morning, are available to download from our website, via the QR code here, or via the link in the Chat, where you will find other useful information. Please use the Q&A to ask any questions. We will do our best to answer them during the webinar or will
Slide 4: CPD course information and feedback
This is a CPD Course and provides 1 hour of relevant CPD. Please use our feedback form to request your CPD certificate for attending. Certificates will be sent out by the end of November, once your attendance has been verified. We appreciate all feedback, which helps us to plan future events to ensu
Slide 5: Presenters: Mark Lumsdon-Taylor and Tim Dee-McCullough
Mark Lumsdon-Taylor Tim Dee-McCullough Sustainability & ESG Partner Sustainability & ESG Technical Director mark.Lumsdon-taylor@mha.co.uk tim.dee-mccullough@mha.co.uk 4
Slide 6: Poll: ESOS compliance status
Where is your organisation with ESOS compliance? • We fully complied before the July and August deadlines • We’re not in scope, and don’t expect to be in scope • We haven’t registered yet, but we breach the thresholds • Don’t know / never heard of ESOS 5 5
Slide 7: General Election 2024 – what has changed?
General Election 2024 – what has changed? 6
Slide 8: Post-election changes: ESOS, EPC ratings, UK SDS
• Environment Agency has found its teeth on ESOS • Rental properties to require EPC ‘C’ rating before they can be sub-let – climate risk impact on financials • No visible acceleration of UK Sustainability Disclosure Standards • We expect any new announcements to be made via the Autumn Budget Stateme
Slide 9: Scoping Environment Agency enforcement letters
Scoping Environment Agency enforcement letters • >250 employees • Sporadic approach, largely driven by most recent financial statements lodged • Revenue >£44m and gross assets with Companies House >£38m • EA staff do not always know the Determined at UK entity level difference between consolidated a
Slide 10: EPC rating impact on rental property valuation
• Scope of requirement expected to include both private and social housing • Impact on valuation of properties, where carried at fair value / revaluation method - are the properties lettable? • Impact on valuation of goodwill / associated intangibles – reduction in rental income while work carried o
Slide 11: Poll: readiness for climate-related financial disclosures
Is your organisation ready for climate-related financial disclosures? • Yes, we already prepare disclosures under the TCFD or Companies Act • No, but we plan to do so • No, we have never considered this 10 10
Slide 12: Update on UK Sustainability Disclosure Standards (UK SDS)
Update on UK Sustainability Disclosure Standards (UK SDS) 11
Slide 13: TCFD, ISSB and UK SDS timeline
• LSE Main Market groups already subject to TCFD framework • Larger groups (>£500m revenue and >500 employees, or just >500 employees for AIM registrants) already subject to Companies Act version of requirements • ISSB published its inaugural standards in July 2023: • IFRS S1 General Requirements fo
Slide 14: UK SDS expected to replace TCFD
• Expected to replace TCFD in the UK Listing Rules for LSE Main Market registrants • Could replace Companies Act requirements for AIM-listed or large private groups • Not expected to be mandatory for other groups initially however we consider it is only a matter of time 13
Slide 15: Companies Act climate-related disclosure requirements
(a) A description of the company’s governance arrangements in relation to assessing and managing climate- Governance related risks and opportunities; (b) A description of how the company identifies, assesses, and manages climate-related risks and Risk opportunities; (c) A description of how processe
Slide 16: Observations on first-year climate disclosures
• Businesses were largely unprepared and in many cases their board did not discuss climate-related risks prior to year end • Very few businesses invested in scenario analysis • High number of businesses disclosed only parts (a) to (d), stating that requirements (e) to (h) “were not relevant to under
Slide 17: Preparing for the CSRD
Preparing for the Corporate Sustainability Reporting Directive (CSRD) 16
Slide 18: CSRD scope criteria and phase-in timeline
Large companies meeting 2 of 3 criteria: Revenue > €50m Non-EU groups with an EU- Gross assets > €20m registered subsidiary or >250 employees branch, EU revenue > €150m 2024 2025 2026 2028 Largest PIEs in EU, with >500 employees Listed SMEs, small and non-complex financial institutions, captive (re)
Slide 19: European Sustainability Reporting Standards (ESRS)
European Sustainability Reporting Standards (ESRS) Consistent framework across topics along 4 pillars 18
Slide 20: Impact and financial materiality
• ‘Inside-out’ approach • Assesses ESG Impact impacts of business materiality activities and value chain on others • ‘Outside-in’ approach • Assesses ESG risks and opportunities Financial through a financial materiality lens 19
Slide 21: Double materiality assessment
Double materiality assessment Severity (How good or bad is it, really?) Scale Scope | Remediability [4 (How grave?) | (How widespread?) § (How solvable?) SS —_c = x = Financial quantum Likelihood (How probable?) Likelihood (How probable?) 20
Slide 22: Materiality assessment process
Materiality assessment process Our materiality assessment process in 2023 included the following: DOUBLE FINANCIAL MATERIALITY MATERIALITY MATRIX IMPACT MATERIALITY STAKEHOLDER IDENTIFICATION ENGAGEMENT STAKEHOLDER OF MATERIAL ANALYSIS TOPICS 21
Slide 23: Double materiality assessment tips
• Start ASAP. A decent DMA takes between 5-8 months • Engage your assurance provider from the outset – they will need to observe stakeholder engagement sessions • Identify your potential stakeholders – who are the people impacted by your activities, or your value chain activities? • Don’t shortcut t
Slide 24: Value chain: contacting customers and suppliers
Value chain: Do we really need to contact our customers and suppliers? Yes, but be strategic • Map the value chain by identifying business activities upstream, downstream and within operations • Stakeholder surveys aid identification of impacts, risks and opportunities but should not be relied on in
Slide 25: Presenter contact details
Mark Lumsdon-Taylor Tim Dee-McCullough Sustainability & ESG Partner Sustainability & ESG Technical Director mark.Lumsdon-taylor@mha.co.uk tim.dee-mccullough@mha.co.uk 24
Slide 26: Save the date: next Finance Directors Update Course
Save the date We host a range of seminars and online webinars throughout the year, which you can find out more about on our website. Please save the date for our next Finance Directors Update Course: Date: Thursday 13th February 2025 Time: 8.30am – 12.30pm CPD: 3 hours www.mha.co.uk/events 25